John Dalli probably had good intentions when he gave Lowenbrau a piece of land in Qormi by perpetual emphyteusis in 1990 but this does not cancel out the consequences of the deal, according to PN MP Jason Azzopardi.

The land transfer deal is the subject of a hot debate, with the PL claiming political interference to favour private business and the PN MP insisting he did the right thing by not interfering in a valuation exercise led by the Government Property Division (Lands Department).

Last week, Dr Azzopardi laid the blame with Mr Dalli, saying that this was the result of an ‘unusual’ deal cooked up in 1990. The decision to grant the site by perpetual emphyteusis allowed Marsovin (the owner of Lowenbrau) to make the best use of that agreement in 2009, when it bought the prime site for just €466,000. It then sold the land to businessman Nazzareno Vassallo for a whopping €8 million.

It was also pointed out last week that the former EU Commissioner later went to work with Marsovin, and chaired the company between 2004 and 2008. Speaking to The Malta Independent on Sunday, Mr Dalli insisted this was not a case of conflict of interest, saying he had gone to work with the winemakers “many years” after the 1990 deal, which he defended by saying that it led to job creation. Mr Dalli also said Jason Azzopardi was trying to blame the whole thing on him, in an attempt to hide his mess.

 

John Dalli was warned

“I am not questioning Mr Dalli’s motives,” Dr Azzopardi told this paper, “but, whatever he says he gave that order in 1990 and this is all his doing. No one can deny that his order triggered an automatic process by which the emphyteusis could someday be redeemed by simply multiplying the annual ground rent by 20. Dalli tied everyone’s hands. Period.”

The PN MP insisted that, had Mr Dalli (above) transferred the land through a long lease, like any other factory, this would never have happened. “When Marsovin exercised its legal right and redeemed the ground rent in 2009 the government was no longer in the picture. The company could dispose of the land in any way it pleased.”

Asked whether he thought Mr Dalli was involved in a case of revolving doors, Dr Azzopardi said he would not be drawn into such an argument. “My job is to state the facts, the undeniable facts. It seems Mr Dalli had been warned (in cabinet) about the consequences of such a deal. He knew, or should have known that what the consequences would be. I do not doubt his intentions but Mr Dalli should not run away from the consequences of his decision.”

 

Vassallo could have been referring to the arbitration process

Dr Azzopardi was also asked to react to court testimony, published by Justice Minister on Friday, in which Nazzareno Vassallo (above) spoke of a meeting he had with the ‘minister responsible for lands’ and during which the minister had spoken of a ‘compromise.’

Dr Azzopardi was quick to point out that, at the time, he was not the minister responsible for lands. In 2011 he was parliamentary secretary for lands, under Minister Tonio Fenech. Both Dr Azzopardi and Mr Fenech have denied meeting Mr Vassallo.

Now, Dr Azzopardi thinks that Mr Vassallo might have actually been referring to an official arbitration effort led by the GPD.

In 2011, Dr Vassallo was informed that, two years previous, when Marsovin redeemed the ground rent for €466,000, a specific condition stating that the land could only be used as a brewery had been abusively removed. This meant that Marsovin had paid less than it should have for the land. Legal steps were initiated against the Vassallo Group, which by then had become the owner of the land. An arbitration committee was set up, consisting if an architect from the GPD, an architect nominated by Vassallo Group and a chairman, Professor Alex Torpiano. They were tasked with working out the real market value of the land, including the removal of the ‘brewery-only’ clause, in 1990. Eventually they calculated that the freehold value of the land at 1990 values was €706,000. The Vassallo Group, under protest, paid the difference. It then sued Marsovin, in a case that is still ongoing.

“Mr Vassallo might have been referring to this arbitration process in court when he used the word compromise. Please understand that arbitration is a very normal process in cases like these. The GPD regularly engages in such processes in a bid to settle out of court. God forbid that every official letter it sends turns into a full-blown court case,” Dr Azzopardi said, reiterating that he had never met Mr Vassallo over the issue.

 

NAO report clear that I did not interfere

The Labour Party says Jason Azzopardi, as PS responsible for lands, should not have allowed the architects to use 1990 values. It says the public got a sour deal when the freehold value of the land at 2009 values was around €7 million. But Dr Azzopardi insists that he did the right thing by not interfering. “The minister should never interfere in a valuation process by architects. This would open the doors to abuse. Imagine if things happened the other way round – if the architects used 2009 as the base year but I told them to use 1990 levels. What would have happened? I would have been accused of interfering to favour the buyers. I am proud that I did not interfere, as pointed out several times in the NAO report.”

Dr Azzopardi said the Justice Minister was accusing him of interference when the NAO report was clear in that regard. “It is evident that Owen Bonnici does not believe the NAO report. He was also caught lying with this affidavit business. What was supposed to be an affidavit that had not yet been seen by the NAO turned out to be court evidence that the NAO had seen, and still ruled that there was no political interference.”

Dr Azzopardi said the PL had, from day one, engaged in a campaign of malicious spin, omitting certain details in the Lowenbrau land transfer deal to give the impression that Zaren Vassallo was given public land in return for peanuts when he paid over €8 million for it.

The PN MP said the Justice Minister was engaging in personal vendetta and hatred. Asked what the reason behind this was, Dr Azzopardi said that was a question that should be answered by the minister. 

 

‘Vassallo was angry at me’

Dr Azzopardi insisted that the suggestion that he had maneuvered to accommodate Nazzareno Vassallo made no sense.  “In 2011, when I ordered that legal steps be taken against his company, his lawyers asked me to meet Mr Vassallo. I refused, and this is all black on white. I got to learn, through the grapevine, that Mr Vassallo complained a lot about me because I refused to meet him. All this will come out in the libel case I have filed against Owen Bonnici (above).”

Asked if the timing of a loan Mr Vassallo gave to the PN – a few weeks after the Qormi land transfer – was, to say the least, unfortunate, the PN MP said: “That is irrelevant since I did not speak to anyone from the Vassallo group and no one spoke to me throughout this whole issue. I only found out about the loan two weeks ago, after reading about it in a newspaper. I was never privy to this information and never should have been.”

When we pointed out that Mr Vassallo is a well-known PN benefactor Dr Azzopardi insisted he was not privy to such things and said he and Mr Vassallo were not on familiar terms (ma niekolx il-kirxa mieghu).

 

The politician should not have to answer for this

Dr Azzopardi refuted the suggestion that he was not in control over a department that fell under his portfolio.

“It was negligent and someone had to answer for the removal of the condition but surely it is not the politician who should answer for this. The politician should be made to answer if there are political shortcomings, undue interference, an illegal order or twisting of rules. No one expects the Justice Minister to resign if there is a miscarriage of justice, or the Planning Minister to resign if a planning permit is revoked.”

Dr Azzopardi said his main priority had been to rectify the mistake but efforts were made to identify the person responsible for the removal of the clause. “If I remember well they eventually found that this was essentially a mistake by the notary.”

He drew a parallel with a case involving the GWU – the NAO had found that a lease between the union and ARMS was in breach of the GWU’s contract with government. “The cases are identical but, while I took action against Vassallo in the space of an afternoon, the government has dragged its feet for the last 15 months and has tried to cover for the GWU. It had to be us, the Opposition, to take the case to court. Owen Bonnici, who failed to carry out his duty, as requested by the NAO, in the GWU case, has the gall to criticise me for taking immediate action against Vassallo.”

 

Editor’s note: The Malta Independent has also requested an interview two weeks ago with Justice Minister Owen Bonnici but we are still waiting for a reply.